Making sense (and, sometimes, nonsense) out of Current News, Issues, Politics

Friday, February 10, 2017

Democrats are Sure to Blame Trump for Rising Unemployment Rates

For the last 7+ years, the President Obama, enjoyed falling unemployment rates because many unemployed workers simply gave up looking for work. As a result, and under the current official unemployment calculation rules, they were no longer considered part of the workforce. Subsequently, President Obama saw increasingly improving unemployment rates because these people were MIA as far as the Census Bureau was concerned. In fact, if they are had been added into the "Alternative Measures of Unemployment (U6)", the real rate would be double what it is.

A recent survey reported by CNBC, in an article titled "US unemployed have quit looking for jobs at a 'frightening' level: Survey", clearly explained this fact. According to that polling, 59% of Americans out of work for 2 or more years had given up looking for employment. Overall, 43% of all those out of work have given up trying to find a job. All of which are no longer in the Census Bureau's calculus of unemployment rate.

Now, following Trump's election, it appears that many of the these former uncounted "bench sitters" are starting to look for work, again. As a result, the unemployment rate is rising:

Click on Graphic to Enlarge

Each month since Trump was elected, the unemployment rate has increased while the Labor Force Participation has also increased. This, to me, suggests that those former "bench sitters" are believing that Trump will find them work; and are once again actively looking. They are now among the "counted" and the unemployment rate is rising. It is no coincidence that the labor force participation rate -- the percentage of workers who consider themselves in the workforce -- went from 62.6% in November to 62.9% in January; and, over the same period, the unemployment rate rose from 4.6% to 4.8%.

The downside of this is that uninformed people will blame Trump for rising unemployment when, in fact, the real culprit was the Obama Administration. It is highly possible that the unemployment rate will go well above 5%. And, there is no way that the anti-Trump media, will go out of their way to explain the truth.